Health and safety is the Cinderella of the business environment. It’s often seen as a ‘bolt on’ extra that has nothing to do with risk. However, that’s so far from the truth as to be ridiculous. In fact, that’s one of the reasons we named our company Risk and Safety Plus.
Most entrepreneurs don’t realise that risk equals opportunity. And, of course, opportunities can create profit – often big profits. Let’s take a look at a well-known business tool – the Balanced Scorecard – and see how risk fits into the four areas this covers – finance, operations, people and sales and marketing.
• Finance: There are two sides to this – money saved by more efficient processes reducing insurance premiums and cost of accidents; and money generated by more effective systems improving processes so they deliver a lower cost outcome, in less time with fewer people – creating more profit overall.
• Operations: Using business process mapping to improve the way things get done, streamline systems and processes and increase the outputs for less input. Business improvement covers the risks involved in achieving results.
• People: A great deal of lip service is given to ‘our people are our greatest asset’, but little attention is given to the risk that arises from key knowledge, experience and information that is in people’s heads. What happens when that individual is no longer there? How will that knowledge and experience be captured? People are part of the process, without them your organisation cannot function – losing their knowledge is a real risk.
• Sales and marketing: So what has sales and marketing got to do with risk and safety? That depends on how good your sales team are! Risk occurs when they’re very successful – and sell more than your production and/or supply chain are able to deliver or your support services are geared to deal with. Poor delivery times and service support don’t do your reputation any good at all.
So risk is involved in every aspect of a business – time for entrepreneurs to wise up and start taking a look at the risks that are engendered in doing business. What can be done to manage these effectively and actually turn risk into an opportunity that delivers profit? The answer is here.